USAC Compliance, Audit Preparation and Defense

With increased frequency and vigor, the FCC is enforcing its most onerous and potentially costly regulations — its Universal Service Fund (“USF”) contribution rules. The Commission primarily relies upon its USF administrator, the Universal Service Administrative Company (“USAC”) to enforce its rules through audits. The FCC, in conjunction with USAC, also evaluates compliance through informal “reviews” or “desk audits.” Whether an audit or informal review, these evaluations can be overwhelming unless your company is prepared. USAC and the FCC conduct such inquiries based on the year-end “True-Up” revenue report- the FCC Form 499-A. If you are concerned about your company’s FCC Form 499 / USF compliance profile, contact The CommLaw Group today.

Our firm has been through every step of the process. We speak from experience when we say that USAC will exhaustively evaluate your company’s compliance with a myriad of accounting, jurisdictionalization and revenue reporting “rules” – from FCC regulations, to Form 499 instructions, to USAC policies. These “rules” are constantly changing, making it difficult, if not impossible, for a company to stay informed, let alone, to comply with applicable requirements.

With new or changing regulation also comes increasingly complex revenue reporting and heightened regulatory scrutiny. USAC leaves no stone unturned, which can make even managing the process a nightmare without the assistance of experienced counsel. But, fear not – you can manage a USAC audit – you just need to prepare! It’s never too early evaluate your company’s compliance profile.

Once USAC contacts you with an inquiry, it’s too late to begin to prepare. USAC expects a response to its initial list of questions within a week or two. But, don’t panic! We’re here to help! The CommLaw Group can help your communications organization identify compliance issues, prepare for, and defend a USAC audit or review.

Although USAC examines only one year’s Form 499-A filing, at the conclusion of an audit, USAC will direct the filer to apply its findings to prior years. Without any limitations period on USAC’s ability to look back in time to identify under-reported revenue and missing contributions, the stakes are incredibly high. Don’t delay. Contact us today!


  • Helping you prepare for regulatory compliance audits
  • Assessing your company’s current state of compliance and advising on possible audit issues
  • Reviewing records relating to Form 499-A reporting to provide the best possible support for reporting methodologies, including:
    • Financial records
    • Compliance reports
    • Contracts
    • Records relating to revenue classifications and allocations
  • Records relating to traffic jurisdictionalizations (such as CDRs and traffic studies)
  • Estimating potential exposure in the event of a USAC reclassification of revenues
  • Identifying potential gaps between financial or traffic records and Form 499 reports
  • Examining and advising on enhancements to internal controls and regulatory processes
  • Evaluating and mitigating potential exposure to penalties for non-compliance
  • Offering solutions to mitigate potential compliance issues identified during the audit process
  • Performing detailed analyses and calculations of possible audit results as the audit progresses
  • Advising entities with complex multi-faceted issues, including potential exposure for affiliated entities
  • Providing guidance on options to respond to USAC questions and conclusions
  • Challenging USAC conclusions at odds with established precedent
  • Improving regulatory processes to help drive revenue enhancement and cost optimization while maintaining compliance
  • Assisting you in the regulatory revenue record to report process, including the proper identification and allocation of revenues and costs to appropriate categories and jurisdictions
  • Appeals of USAC decisions to the USAC Board, Wireline Competition Bureau, the FCC and beyond

Do You Need a USF Compliance Review?

To determine whether The CommLaw Group can help your communications organization comply with applicable FCC and state regulatory requirements, ask yourself the following questions.

  • Do you have internal controls in place related to your Form 499 reporting?
  • Do you have coordination between your accounting and reporting teams?
  • Do you have a formal process to assess risk related to current regulations and pending regulatory changes?
  • Do you offer bundled services to customers involving wireline, wireless, voice and data services offered by multiple affiliates and/or technologies?
  • Are extensive manual adjustments and/or reconciliations required when preparing regulatory reports?
  • Are regulatory reports prepared consistently across jurisdictions and affiliated entities?
  • Are you currently subject to regulatory-mandated compliance audits at the federal or state level?

Clients that have worked with The CommLaw Group have reported numerous benefits from our services, includng:

  • Reduced risk of regulatory non-compliance, limiting fines and penalties and regulatory audit exposure
  • Potential reductions in federal USF contributions, resulting in increased net income and/or reduced customer billings
  • Increased effectiveness and efficiency of regulatory reporting process
  • Enhanced awareness of regulatory changes and related business implications/risks
  • Enhanced preparation for compliance audits from regulatory agencies and third-parties with minimal disruption to normal operations
  • Automation of regulatory processes with appropriate controls, enabling continuous monitoring of regulatory compliance and timely reporting